The Pennsylvania Lottery won a big victory in court over its commercial gambling competitors this week.
A state judge ruled in favor of the Lottery, saying that its new Internet-based games do not violate the online gambling market in which Pennsylvania casino operators were allowed to enter in return for a $10-million fee over the past few years. Both companies got access to the state’s market as part of the significant gambling expansion under a bill that was passed by the General Assembly in 2017 and was later signed into law by Governor Tom Wolf.
Even before the official launch of online casino games in 2019, operators of such services were concerned that the online game designs from the Lottery, as they believed these designs threatened to seriously affect the market by capitalizing on a considerable part of it.
The aforementioned lawsuit was filed by a total of seven casino operators. All five of the racetrack casinos in the state and the operator of Live! Casino Philadelphia took part in the legal action. The plaintiffs asked the court to fully eliminate or impose new limits on some offerings of the Pennsylvania Lottery.
Most of all, the companies noted that at least nine online games offered by the Lottery shared the same titles and/or themes with popular slot machines in local casinos or online casino venues in other states. The seven casino companies also claimed that the average payout rate ranges from 81.6% to 89.1%, which is closer to the 85% minimum payout rate required for traditional slot machines in the state rather than to the typical instant Lottery games’ payout that usually ranges from 61% to 77%.
Common Features Are Not Iconic for Online Casino Games, Judge Says
According to the allegations of the lawsuit filed by Pennsylvania’s casino operators, the state Department of Revenue required the game supplier to agree not to sell the same games offered by local casinos. In the plaintiffs’ opinion, that was pretty much an admission that the online Lottery games are, in fact, casino games that could otherwise be offered by themselves.
However, Judge Renee Cohn Jubelirer said that similarities between the online Lottery games and regular casino games are a sign of the entertainment development and technological innovation across the market than of some kind of violation across the market. She ruled that the features challenged in court by the casino companies are not key, iconic or signature ones to casino slot machines and seem to relate to technological progress in online gaming.
At the time she dismissed the case, Judge Jubelirer also said that the controversial features were associated with some sources of entertainment that could have been an inspiration for the designers of slot machines and online Lottery games. The judge said that the state’s Legislature has never intended to put obstacles in the way of either one of the online gambling options or to prevent them from taking advantage of the constantly changing gaming and entertainment sector and the technological advances in it.
A spokesman for the casino operators did not comment on the court’s ruling but explained that the plaintiffs are considering whether to appeal the decision. Drew Svitko, the Executive Director of Pennsylvania Lottery, described the ruling as a big victory of the Lottery that only wanted to remain competitive in the quickly evolving gambling market of the state and explore new options.
